Cargo shipments’ decline seen

The volumes of cargo being shipped via CNMI ports are expected to decline about 5 percent annually between 2005 and 2010, according to a Washington-based consultant hired by the Commonwealth Ports Authority.

BST Associates noted that the Commonwealth’s cargo volumes had dipped by an average of 3.2 percent per year between 2001 and 2004. The annual decline rate is forecast to reach 4.9 percent between 2005 and 2010 as a result of the ongoing downsizing in the CNMI garment industry.

Estimates by BST Associates showed that overall cargo volumes would reach only 745,000 revenue tons in 2005, as compared to approximately 845,000 revenue tons in 2002 and 825,000 revenue tons last year.

Inbound cargoes, which are dominated by petroleum products, textile inputs for the garment industry, and a variety of consumer and construction-related products, are expected to drop by 8 percent in 2005 as compared with last year.

Inbound cargoes totaled 674,573 revenue tons last year and they are seen to total only 621,620 revenue tons this year.

A 27-percent decline in inbound textile materials is the most significant factor for the expected decline.

Likewise, outbound cargo movements are forecast to suffer the impact of the garment industry’s situation. The garment industry accounts for 88 percent of outbound revenue tonnage.

According to BST Associates, garment and clothing cargoes would decline from 133,958 revenue tons last year to 108,972 revenue tons this year.

Meanwhile, overall outbound cargoes would drop from 150,559 revenue tons in 2004 to 123,673 revenue tons this year.

BST Associates said that the projected 4.9-percent annual decline in CNMI cargo volumes was “based upon an expected decline in the Saipan garment industry from 134,000 outbound revenue tons in FY 2004 to an expected 63,000 outbound revenue tons in FY 2009, representing a decline in garment industry output of 53 percent.”

Other products were forecast based on per capita consumption, the consulting firm added.

Several garment factories have closed since the Jan. 1, 2005 lifting of quota restrictions that used to limit garment exports from foreign countries to the United States.

The increased competition in the U.S. market, compounded by other economic factors, has also caused some garment manufacturers to downsize operations.